The Trump Administration’s attempts to support coal have led renewable energy developers to focus on defending their place in America’s energy mix, and rightfully so – there’s no question that the pending solar import tariff decision or the Department of Energy’s out of market cost-recovery proposal will impact U.S. solar and wind markets.

US President Donald Trump holds up a 'Trump Digs Coal' sign as he arrives to speak during a Make America Great Again Rally at Big Sandy Superstore Arena in Huntington, West Virginia, August 3, 2017. SAUL LOEB/ AFP / Getty Images

The International Trade Commission’s (ITC) recommended solar tariff proposal options range from a licensing fee to a 35% tariff on solar panel imports, and if implemented as proposed, the tariffs may hurt small and medium-sized businesses more than big developers. Similarly, DOE’s proposal could keep uneconomic coal and nuclear running by creating a $10.6 billion annual subsidy allowing them to run at a loss but still receive revenue. No one yet knows what Trump will do with the ITC proposal or what the Federal Energy Regulatory Commission will do with DOE’s proposal, but the fate of many companies certainly lies in the balance.

The latest electricity cost comparison published by international financial advisory firm Lazard reveals why relentless renewable energy cost drops will keep open up opportunities for developers. For instance, to examine solar’s domestic competitiveness, focus on the crystalline utility-scale solar line – import tariffs are proposed for crystalline solar panels. Compare the unsubsidized cost of crystalline utility scale solar ($46-$53 per megawatt) with any of the conventional sources (below the dashed line). Unsubsidized solar beats nearly all fossil fuels – natural gas combined cycle is the only conventional generation source in range from a pure cost perspective right now.

Lazard

Lazard's 2017 Unsubsidized Levelized Cost of Energy Comparison

By the most conservative estimates, solar panels make up less than half of the total installed cost of a solar project. So, the highest proposal from the ITC (a 35% solar tariff) would add 17.5% to Lazard’s reported cost of crystalline utility-scale solar. Since 2010, overall installed costs for utility scale solar have dropped an average of 18-20% —if that trend continues, it would put this tariff in the noise for utility scale solar. But let’s be conservative: Even if we assume that historically observed drops in the overall cost of solar stop altogether, we get a range of $54-62 per megawatt. Natural gas combined cycle is still the only conventional alternative in range, save for the cheapest 3% of all coal generation.